City Sales Ltd

August Comment 2010

Mon, 02 Aug 2010 00:00:00 +1200

DARLING HARBOUR......DARLING?

No, I’m not desperate and things are chugging along very successfully but I sense a change out there.
It’s a good change and it’s an “owner-occupier” change.
From our historical 30% sales to owner-occupiers, June was 45% owner-occupiers and July 39%.
This movement is unprecedented over the 19 years since the Apartment Market started and augers well for our clients.
Why?
Because owner-occupiers have an actual NEED for accommodation and this slight sense of purpose is being reflected (I think) at last, in some upward pressure on prices.
We finally have buyers actually waiting for stock and this presents an opportunity for our clients.
Perhaps all my raving on the radio is paying off at last?
You have to auction (because I don’t know with confidence what anything is worth any more) and if you do so with me in August or September this year I am going to be outrageously generous.
If you sell at, or within one week of the auction, (which over 90% of our clients do) you will be going with a friend or partner for two nights to a very nice abode in Darling Harbour, Sydney – flights and accommodation on me.

If you don’t have a partner or any friends I will come with you, but that’s as far as it’s likely to go.
We never know what’s around the corner but RIGHT NOW there is strong enquiry - and sales, it’s just about Spring and you know what they say about…”first cab off the rank”.
And you’d love to tell everyone that Martin sent you to Sydney.
It’s THIRTY – THIRTY – SIX – OH – ONE and someone will send you the info.

And I expect to be sending at least 50 couples.

Oh my God, what will that cost?!!!

Too late.

Call.

Cheers for August!

Martin
MANAGING DIRECTOR

Source: August Comment 2010

July Comment 2010

Fri, 09 Jul 2010 00:00:00 +1200

NOT DEPRESSED - SORRY

Yeah, aren't you getting sick of it?
The V's becoming a W again, the UK is cutting back its public service 40%, the U.S.A. is sliding back into recession - and now the Chinese are hitting a property “bubble”.
That's where it can pop and all the properties are gone.
And this week's NBR is talking about “Grumpy Growth” for New Zealand.
Seen it all before.
Not buying it.
We're rocking and rolling - AND we're not stupid.
The buyers (new ones at every auction) are bidding and buying as fast as we line them up and some of the prices achieved are freaking us out.
To cope I'm investing another serious salary in my friend and current salesperson Pauline Bridgman as a Sales Manager to back up overworked and overpaid...they're ALL overpaid....Sales Director, Mike Richards.
And we need 3 new sales staff.
If you have fire in your belly and don't have a philosophical objection to being overpaid in a recession be Pauline's first success: paulineb@citysales.co.nz...
Or you can always contact me directly...but I'm kinda busy.
It's a stunning winter's day and Spain's going to win.
Cheers!

Martin
MANAGING DIRECTOR

Source: July Comment 2010

June Comment 2010

Tue, 15 Jun 2010 00:00:00 +1200

IT'S WORKING

Our leasehold radio promotion (costing me $14,000/month!!!) is getting some real traction with our having sold 15 leasehold suites in the past 4 weeks……and wait for this ……from $132,000 to a whopping leasehold palace at $945,000.

We have even noted Herald Economics writer Brian Fellow and Investment writer Mary Holm mooting that first home buyers may have to consider leasehold apartments as their first option.

(Brian is listening to George FM??!!!).

The promotion (click back to May “Comment”) is over George, The Edge, ZB, Coast and Easy Listening and we have some very smart money now being invested.

Our opinion is that the leasehold pendulum (Yes they’re all using “Pendulum” too) has swung so far against leasehold that they are ridiculously priced – for the moment, and that we are going to promote “Leasehold” until we swing the pendulum back to some sense of order.

If you need to sell right now at least we are going to be able to provide you with 5 bidders rather than one.

And if you don’t need to sell man it out for 18 months and let’s see where we get to.

I am certain that we’ll succeed in talking some sense into this market.

On the other hand, I’m likely to start talking about spring shortly but God loves a trier.

It’s beautiful out there for now.

Have a great June.

Martin
MANAGING DIRECTOR

Source: June Comment 2010

May Comment 2010

Tue, 11 May 2010 00:00:00 +1200

PUTTING MY MONEY WHERE MY MOUTH IS

If you’re an investment punter, listen up.
If you own a leasehold apartment turn your mobile off, close the door and read carefully.
You’re going to like me.
I believe there’s a nascent market out there that has given up on the Auckland housing market and is renting itself into oblivion.
Willfully.
And I’m going to seduce that market into buying leasehold – because it’s so cheap FOR A LIMITED TIME that they’d be stupid not to act.
Excuse the crudity but City Sales, at my cost of about $10,000 a month, is going to sex up leasehold apartments.
We’re saying the pendulum has swung too far against leasehold and that leasehold apartments are, right now, irresistibly affordable.
And we’re targeting an effete, egotistical market that is currently completely unaware that they can actually afford something.
Which is why we’ve started with George FM and The Edge (which cater to the Yuppies and Dinks – dual income no kids – of today).
And this week a concerted campaign with ZB, Coast and 91FM.
The ads are here on my web site – you might find them rather bold but I’m sure we can loosen up this stagnated market and provide owners with some options.
We’re determined to initiate a movement that will swing the pendulum back – not to the top again but to the middle.
And that’s the promotion.
If you wish to exit the leasehold market you’ll hear from us soon – take advantage. I don’t know of a Real Estate Agency spending money like this to generate a new appetite for a market but you’d have to admit, we’re tryers.
And you’re going to like a Real Estate Agent.

Martin
MANAGING DIRECTOR

Source: May Comment 2010

April Comment 2010

Thu, 15 Apr 2010 00:00:00 +1200

LEASEHOLD....YOUR DAD WAS RIGHT.... (MOST OF THE TIME)

When your Dad said: "And never buy leasehold!" he was right to a large extent. And certainly a "leasehold investment" is an oxymoron (those aged under 40y click to Dictionary).

But markets change and we believe, right now, that leasehold delivers a compelling opportunity. And I'm putting my money where my mouth is with a concerted radio campaign to promote leasehold apartments....as they say on the McDonalds ads..."for a limited time!"

Let me explain.

Despite the tabloid rantings of the NZ Herald on Auckland’s housing market over the past two years, values have held and the spellcheck generation faces an entry point of around $500,000 just to get started. And no, New Lynn doesn't appeal in any case.

So consider this – as a startup:

Last fortnight we sold at auction a leasehold two bedroom, two bathroom, near new suite down on Beach Rd for $120,000.

Not a misprint no, but I did forget to add that it included a carpark, gymnasium and swimming pool. Oh yes, and a tennis court.

$120,000...how come????

The Ngati Whatua maori leaseholding covers all the land between Quay Street and Beach Rd, Britomart Place to The Strand. The apartment complexes on the site: Scene One, Two and Three, Stadium, Cuba, The Docks, Hudson Brown, Railway Campus (now Grand Central), The Landings, Mirage, 8 Quay, Cotesmore Way, Parnell Terraces and Dovedale Place – 1,870 units in all.

In order to encourage development of this previous wasteland the Ngati Whatua offered in 1996 a 150 year terminating lease but, extremely generously in my view, with the first 15 years rent free.

You got it. August 2011 is D Day - or is it?

Much of prime London is leasehold.

All of China is leasehold (barring bits of Hong Kong).

All Auckland CBD waterfront apartments are leasehold.

Where we warned publicly from 2004 that the apartment market was paying through the spruikers freehold prices for leasehold apartments we believe now the pendulum has swung the other way ....to the point that a massive overcorrection has occurred, driven by the uncertainty on the Ngati Whatua block certainly, as to where ground rents are headed.

We believe construction costs for new apartments are in the $7,000m2 range. And you can buy leasehold from $1,000m2.

An 85% discount?

Yep.

But pendulums swing back and we're going to do all we can to accelerate it.

But right now, ask Dad for a guarantee, let a flatmate pay the ground rent and you pay the apartment off.

Then call City Sales and it's off to New Lynn.

(You'll actually stay in the City and rent out New Lynn).

Call us, but do it now.

Martin
MANAGING DIRECTOR

Source: April Comment 2010

March Comment 2010

Thu, 04 Mar 2010 00:00:00 +1300

THE SPRUIKERS ARE BACK!

Seven out of nine sold at yesterday's auctions but there's a murky crowd hanging around in the background.
A regular attendee at our auctions - someone staff are not allowed to deal with because of past practice and from whom we will not accept a bid - is even promoting himself as Auckland's apartment expert and running seminars on how to steal apartments!
Haven't we had enough?
First City, Investor Forum, Richmastery, McEwan Group, Merlot, yes...I hate to write it...Blue Chip...and now the corrals have emptied again and they’re back in town under a new guise.
We have even had to include a warning on our Listing forms alerting clients to the fact that there are "buyers" out there who will try to "buy" conditionally with the intention of onselling to some unsuspecting victim (many of them in Australia) for a quick profit.
Emerging from the recession, dealing with the victims of the debacle of the last 6 years (see above) we are absolutely amazed that there are still people out there who would attend a spruiking seminar.
Why not just call us and deal at the coalface yourself.
No, we won't knowingly accommodate spruikers although it can be hard to identify them.
The good news is that their presence confirms our view that we’re at the bottom of the market and hopefully headed north.
And Auctions do separate the men from the boys.
Talk to us.
Check out our latest radio promotions (www.citysales.co.nz..."Media").
It's a new era.
And, apologies to The BlackEyed Peas but….this year’s going to be a GOOD year!!!
Yeah, call us.

Martin
MANAGING DIRECTOR

Source: March Comment 2010

February Comment 2010

Wed, 10 Feb 2010 00:00:00 +1300

LATE FOR A REASON

It’s 10 February and I have an excuse for writing my Feb comment so late.
Prime Minister John Key was to (and did) give his precursor yesterday on his sentiment towards the Tax Working Group’s recommendations on restructuring our tax base.

Much outpouring of grief and envy has been directed at what you and I know are struggling property investors and the enmity they foment by those vested interests who would prefer we all invested in the share market.

Hello?

Until the Commerce Commission starts handcuffing cowboy ‘businessmen” in their dining rooms or flash restaurants for collapsing company after company - as opposed to wincing privately as they blast their Porches back to the golf course, forget it.

Do you all think we are stupid?

The Minister of Housing, Phil Heatley, stated at the NZ Property Investment Seminar I also spoke at in August last year that NZ needed 19,000 new houses built a year and 12,000 maximum were being built.

Yesterday’s Herald spoke of immigration reaching 45,000 over the next three years and house prices rising dramatically because the supply is not there (yes, one for the books from the Herald).

Do the economists think all these investment properties are lying empty?

If you don’t get it neither do I – apart from envy and vested interests.

The actual decisions will come out in May’s Budget but Key has given a responsible and fair idea of what he’s planning….and we think it’s reasonable and what we expected of him.

From his hints yesterday, no overall Capital Gains Tax but watch for maybe an ever vigilant CGT if you sell for profit in a short time (2 years???).

Possible ringfencing of losses against personal income – this could spell even more angst for the unsophisticated who have been stitched up into Loss Attributing Qualifying Companies…(talk to us and get out now).

The abolition of the provision for depreciation of residential property (which, apart from maintenance, actually appreciates). This was simply a technique used to bamboozle the Tax Seminar victims into 100% cashflowing their overpriced “investments” and has to ultimately be paid back in any case when the property is eventually sold. The spruikers got so carried away a valuation practice even sprang up called “Valu-it” which specialized in valuing the interior of walls which you could depreciate at a different rate to e.g. bench tops or curtains. At this point it was obvious change was going to come!

And we’re likely to have GST increased to 15%, accompanied by tax cuts.

It all looks what Key is shaping up as – intelligent, fair and reasonable and bodes extremely positively for New Zealand’s future.

But if you are heavily geared and relying on personal tax offsetting the losses on that investment, yes, perhaps talk to us.

But it could have been real bad (excuse grammar).

Martin
MANAGING DIRECTOR

Source: February Comment 2010

January Comment 2010

Mon, 11 Jan 2010 00:00:00 +1300

OPTIMISM ABOUNDS

Happy New Year to our faithful readers/clients, hope you had a better break than I did.
Two nights at Pauanui feeding 23 twenty year olds and cleaning up after them, wistfully remembering the carefree days of youth….but it was fun.
Then flights to Wellington to oversee a very frail aunt.
Rather reflectful on my own mortality.
However I’ve been keeping up with what news there has been and it’s all positive.
Our trading partners, Australia and China are in a far stronger position than most countries and our banks are intact.
Our housing market has recovered to 2007 levels and December for us was a record month.
I am even hopeful that January, our loss month, has a chance of breakeven.
(Yes, I will tell you).
The skeleton crew over Christmas has been literally inundated with new buyers, mainly owner-occupiers and this bodes very well for maintaining or improving capital values.
And Stephanie who heads up our R & M (Rentals and Management) team reports that we have suffered far fewer vacancies over the summer period than usual where fewer tenants have gone awol and the hunt for accommodation has also started early.
We are managing to lift some rents but doing it selectively and pretty carefully.
It’s my first full day back and now my brain is starting to hurt so it might be Prego for lunch and an early swim.
And Tee, my trainer at Les Mills is starting me again tomorrow and he’s not going to like what he sees.
But we’re POSITIVE and it’s going to be a great year!
Stay in touch.
Cheers for January,

Martin
MANAGING DIRECTOR

Source: January Comment 2010

December Comment 2009

Mon, 07 Dec 2009 00:00:00 +1300

LOST AGAIN!

In October (scroll back...FIRST BATTLE LOST) we detailed the court case where the elderly Bartels, spruiked by a now bankrupt lawyer and Blue Chip into investing in the apartment market lost the case and are being forced to settle the unit.

The Bartels subsequently appealed - and if you're in a similar situation have a stiff gin before reading on.

Yes, the appeal has also been rejected by the court.

This is obviously a disaster for the hundreds of similar victims of the worst period of real estate rorting I have seen.

And, while we've complained about it the Commerce Commission just doesn't seem interested in the fact that ALL of these spruiked sales have been perpetrated by so called "financial advisors" illegally selling real estate for commission.

The mess is about to get messier but the good news is at last fortnight's auctions 14 out of 15 sold under the hammer (yes I was in bed, exhausted at 8.30 that night...no, I know you're not going to feel sorry for me) and the tailender sold last week.

And we're auctioning 26 this December and they will all sell too - but the lesson is there's plenty of buying appetite out there so.........you guessed........if you're considering exiting that apartment call us.

If possible, sooner rather than later.

And all the best for Christmas 09, we've enjoyed unbelievable support and success this year, going to have a week or two off at Pauanui if the kids ever let me use the bach...

Cheers for now,

Martin
MANAGING DIRECTOR

Source: December Comment 2009

November Comment 2009

Tue, 03 Nov 2009 00:00:00 +1300

GET MOVING

Our end of year Auction dates are 11 November, 25 November, 9 December and 16 December - if you are contemplating selling please contact us urgently as our market effectively shuts down from Christmas through to a restart late January.
This means that if you miss out pre Christmas you may be looking at a settlement in March 2010.
And in an alarming Listener article by property magnate Sir Robert Jones (Oct 09)...."by 2010 the recession will really be biting compounded by National's traditional tight fiscal policies".
Bob must be reading my website comments - and like me, he's usually right.
No, don't panic, the market is robust and we're selling flat out but it is a time to be realistic and active if you intend to exit.
After putting the same message forward on last week's Leighton Smith Show talkback (Thursdays, 11.25am on ZB 89.4fm) three investors rang and signed up to auction, each of them saying..."I've been putting this off for a year, you're right, get it sold."
Click through the CONTACT US or call me personally any time - mobile is best on 027 498 4097 and we'd love to work for you.
And I'm 56 tomorrow but I only look 54.
Cheers for November!

Martin
MANAGING DIRECTOR

Source: November Comment 2009

October Comment 2009

Tue, 13 Oct 2009 00:00:00 +1300

FIRST BATTLE LOST

Thousands of Blue Chip apartment victims are reeling like Shane Cameron in his first round with David Tua – on the ropes and wondering how much more they have to endure.
See Bob Dey’s (Bob Dey Property Report www.bdcentral.co.nz ) courageous criticism of Justice Randerson who got it so wrong when he found against the elderly Bartles and their fight against Blue Chip, Tasman Mortgages and GE Money.
The elderly Northland couple with limited means borrowed $600,000 for a jacked-up apartment rort, spruiked by now bankrupt lawyer Jonathon Mathias and the judge found no case against the brokers or the lenders.
Yes it’s the wild west in New Zealand and as always, the bad guys get away.
Barrister Paul Dale is quoted as intending to appeal, Bob says everyone else in the courtroom understood Tasman was a related party to Blue Chip but the judge didn’t get it.
Now thousands of similar victims waiting in the wings must prolong the agony of not knowing whether they are solvent and hoping the Bartels can find the funding to continue.
I fear many will not be able to hold out against their lenders and the tsunami of frozen stock in the apartment market may soon begin to add to the current wave of mortgagee sales.
Uncertain times but sales are still very healthy with new faces at every auction.
The latest economist sentiment is a much healthier prognosis of a slow but steady recovery from recession with unemployment levels on the brink of dropping.
Maybe a happier Christmas this year for some.

Martin
MANAGING DIRECTOR

Source: October Comment 2009

September Comment 2009

Tue, 08 Sep 2009 00:00:00 +1200

WATCH OUT

The NZ Herald today reports our Treasury feeling the “recession may be over”.
They feel unemployment is not likely to reach previously expected heights (8%) and bases its upbeat predictions on “the international recovery, positive migration figures, rising business and consumer confidence and an improving housing market”.

For us at City Sales, July, a mid-winter holiday month is typically budgeted as a significant loss month but it was big time the opposite this year - and August was huge.

Why am I feeling nervous?

After the 1987 share market world crash we suffered in New Zealand for four years before we began to emerge from a real depression.

The “recession may be over” after the world banking systems collapsed, what, 18 months ago???!!!!!

We’re as positive as a South African rugby coach but if you’re up to your neck in debt, the boss looks worried ALL of the time and strangers in suits keep coming to the office don’t rely on headlines to help you sleep.

Call us – we are in a fragile economy and we have been through it all.

There is currently an abundance of competent buyers out there but if you’re in any way in a precarious position don’t be seduced that all of a sudden a world-wide financial collapse has just evaporated into the ether.

We’ll tell you when it’s not scary.

But right now you need to call us.

Or show this to your wife and she will.

Because women are smarter.

Martin
MANAGING DIRECTOR

Source: September Comment 2009

August Comment 2009

Mon, 10 Aug 2009 00:00:00 +1200

IT'S SPRING!

Yes we're still feeling good after the loveliest Winter for years and initiative after initiative from the new Government to redirect the economy.
The run up to Christmas has started early and our traditional loss month of July (school holidays, middle of Winter blues) was a stunner.
Eleven Auctions tomorrow will set the scene and the results will be up on this site within 24 hours.
Or if you join our Auction Email Service they will be sent directly to you.
And again, one - a Princes Wharf - has sold prior.... huge one bedroom with entertainer's patio, no car, prime westerly aspect over the water to the Harbour Bridge $242,500.
If you are looking to exit the Apartment Market take advantage now of this seriously growing feelgood attitude and call us for that free, no visit appraisal service.
Before some nutter in North Korea or Somalia stuffs it up.
We're hoping for firming prices, consistent interest rates, continued positive immigration, lowering tax rates, increasing speed limits....but as you know we're salesmen...
Call us!

Martin Dunn AREINZ
MANAGING DIRECTOR

Source: August Comment 2009

July Comment 2009

Fri, 10 Jul 2009 00:00:00 +1200

THE NEW HOUSING CYCLE

While the economists will gnash their teeth we are convinced that a new housing cycle has begun.
And you all know how economists get it wrong.
Colleague Agents in the suburbs are scrambling to find houses to sell and in the lower price echelons new listings are walking out the door often with multiple offers AND back-up Agreements on them.
What is this going to do to the market overall?
Firstly the outrageously overpriced Auckland housing market that some economists predict will fall "another" 20% is simply going to firm up. And despite the best efforts of the New Zealand Herald to collapse this market it has hardly faltered.
It is a good time to buy a house and it is also a good time to buy another apartment.
An upwardly mobile housing market has a positive effect on our Apartment Market.
And a kind word for John Key and our new Government.
While we really were scared the sky might fall in last year (we didn't tell you because you were panicking quite competently by yourselves) Key and his mates are unraveling at pace the appalling incompetence and corrupt ethos infiltrated by Helen Clark throughout New Zealand society over the past 9 years.
There is a growing positivity and pride to New Zealand that I have never seen before - a sense of hope for the future that is real and becoming quite excited.
Just don't listen to the economists.
And the winter has been absolutely lovely.
Cheers for July

Martin Dunn AREINZ
MANAGING DIRECTOR

Source: July Comment 2009

May Comment 2009

Tue, 12 May 2009 00:00:00 +1200

PRE- AUCTION SALES & MULTIPLE OFFERS

The City Apartment Market continues to surprise us.
While we’re supposed to be in the middle of a “Once – In – A – Lifetime” (we hope) recession the Apartment Market is defying gravity.
At City Sales we are regularly breaking our mantra of not entertaining “Pre-auction offers”, as it rather defeats the purpose of an auction but the market has been pressing us with offers that we feel a Vendor must consider and invariably accepts.

The other phenomenon we are experiencing is a surge in multiple offers on a new listing.
City Sales has systems in place where once an agent gets an offer he or she must call or text the Sales Director and if two or three agents advise they are also getting or have an offer the Sales Director, rather than individual agents, will present all offers at the same time. This is obviously to maintain fairness and balance.

Both of these events are new to the Apartment Market and indicate a very real increase in interest.

Long may it last.

And on the overall economy I had the honour of taking a past Minister of Finance to lunch last week (yes, it was Soul, where else could you take him?!) and he confirmed that the sky was not going to fall in and we have much – now – to be thankful for.

One of my sons Scottie is marketing manager for a chain of expensive Argentinian meat restaurants in London and he reported on the weekend that their turnover and “spend” has returned to normal.

And brother-in-law Edmund is down from San Francisco saying they have a long way to go up there but a sense of optimism is returning.

Hey, we’re going to trade our way out of this!

Martin Dunn AREINZ
MANAGING DIRECTOR

Source: May Comment 2009